Life insurance is often an essential component of the financial stability of you in your family. Despite this, only 59% of Americans actually have life insurance in 2020. So why get life insurance in the first place?
There are a number of reasons why life insurance is important. It offers a safety net for your family should a death cause a loss of income. It ensures that loved ones or your estate will not be burdened with your debts should you pass away.
It offers you and your loved ones essential protection in an unpredictable world. Here is everything you need to know about life insurance.
1. If the Breadwinner Dies, Your Family Is Covered
This is the first and foremost thing to take into consideration when asking yourself “is life insurance necessary?”.
While taking out a life insurance policy is not equally urgent for everyone, it most definitely is urgent if you are the sole breadwinner in your family.
Without life insurance, your passing will likely mean that your family loses any and all income, a potentially debilitating situation to be in.
Give yourself the peace of mind of knowing your family will remain secure in any eventuality.
2. It Covers You If You Die on the Job
Say you work in a hazardous occupation where comprehensive OSHA training, which you can find out more about here, is needed.
If your profession has certain risks attached to it, you can access insurance that will cover the lost earnings and expenses for your family in the event of occupational death.
Of course, all life insurance covers workplace deaths in one way or another, but those in hazardous professions can sleep easy knowing there is specific life insurance tailored to the risks of their work.
3. Your Kids Are Protected
Having life insurance isn’t just about making sure your spouse or partner is protected in the event of your passing.
Raising children on a single salary is an increasingly difficult prospect. There are countless stories of one parent passing away and the remaining parent having to manage a much-reduced quality of life for the children.
If both parents have a life insurance policy, this is never a concern.
4. You Can Choose Term Life Insurance
Rather than fretting about whether the expensive ‘whole’ life insurance being offered to you by a slick commissioned agent, consider the alternatives. If you’re wondering “is term life insurance a good idea?”, the answer is invariably “yes”.
Term life insurance is a fraction of the cost of ‘whole’ life insurance, and the actual payouts are much higher.
An agent might try to sell you whole life insurance as an ‘investment’, as the value increases over time, but don’t listen. Term life insurance guarantees very large payouts without you needing to hold the policy for 30 years.
5. Ensure You Don’t Leave a Debt Burden Behind
Finally, any life insurance explained guide wouldn’t be complete without bringing up debt.
If you are one of the millions of Americans who have co-signed debt, then you need to know that the debt will not die with you.
If you have life insurance, you can know for sure that your debts will not cripple the finances of your loved ones when you pass away.
Learn More About Why Life Insurance Is Important
Now that you know the basics of why life insurance is important, it’s time to learn more. Feel free to consult our extensive personal finance guides to learn more about keeping your household on a sound footing.